Posted: Nov 08 '17

3 Myths About Life Insurance

Life insurance is a financial tool that is used to cover liabilities in the event of the policy-holder’s death. Here are a few common misconceptions that prevent people from considering life insurance as part of their financial plan.

1) “Life insurance is expensive.”

The most common concern is that life insurance is too expensive. There are several types of policies to choose from that have different premiums. Make sure the premium fits your budget and the policy amount will do the job you need it to. Think about what you want your insurance to pay for. Are you buying it to pay off a mortgage, provide income to those you leave behind, or both? It doesn’t matter if your age is 25, 40, or 55, there is a life insurance policy to fit your budget. By asking the right questions and working with a qualified agent or broker anyone with any budget can own a life insurance policy and be proud of doing the right thing.

2) “Life insurance is just too complicated for anyone to understand.”

Life insurance agents tend to explain life insurance using language and jargon that is not familiar to most people. As an agent, this is a problem that I’ve seen many times. The best tip I can give you is to never buy a policy you don’t understand. If someone is explaining the details of a policy in language that is confusing, and you are unclear about what it is they are saying, be polite but find another agent.

The bottom line is that life insurance is just MATH. You pay into a policy account. The insurance company takes out the insurance costs and the expense costs from your policy account. If your premiums exceed the insurance and expense costs you will end up with cash values in your policy account. Sometimes these cash values can be withdrawn from the policy and used at your discretion. Not all types of insurance policies have cash values. The types that do have cash values include universal life and whole life policies. Term insurance does not have cash values.

Life insurance should not be complicated. People make it complicated. If you are confused, likely you are working with the wrong agent.

3) “I don’t need life insurance.”

If you have a family, life insurance is one of those staple products like bread and butter. Think about it this way. If you understand the policy that you are purchasing, the premiums fit your budget, and the benefit will do what you designed it to do, how can you lose?

A quick story: a man purchased a fairly large life insurance policy because he had a family with young children he wanted to take care of. He paid premiums for only 6 years before he died of cancer. His death benefit was paid to his family. Do you think that he or his family would say he did not need life insurance and that it was not worth the premiums?

Life insurance is a financial tool that provides cash to a family at a devastating period after the death of a loved one. Take your time, ask the right questions, get understandable answers, and make the right life insurance decision for you and your family. If something happens to you and you pass away unexpectedly, your family will be forever grateful to have the financial support provided by your life insurance. Do the right thing and start checking out life insurance products today.

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About the Author - David Motkoski

David is a well-respected insurance advisor with over 30 years of experience helping healthcare professionals, business owners, and their families secure their financial futures. He takes the time to make certain his clients understand the life, disability, and health insurance products they are purchasing, so they can make the right choices for their budgets, plans, and futures. CONNECT WITH ME ON LINKEDIN